Sprint Nextel CEO Steps Down

With the media reporting on his imminent demise, Sprint Corp. (NYSE: S) Chairman and CEO Gary Forsee stepped down this afternoon, while the company announced some downcast news about its upcoming financial reports.

The Wall Street Journal reported last week that Sprint was seeking a replacement for Forsee, a process that may have begun as early as August. The Journal said Sprint hoped to have a replacement by December.

Sprint announced Forsee's departure today after the stock market closed. A permanent replacement hasn't been found yet. Chief Financial Officer Paul Saleh has been named acting CEO, while independent board member James Hance Jr. will become the acting chairman.

Forsee became CEO in 2003 and led the company through the $35 billion takeover of Nextel. (See Deal Solves Nextel 3G Dilemma.) Lately, though, shareholders had begun to turn on him.

Cries for change at Sprint began earlier this year, as the company had difficulty adding subscribers and turned in disappointing earnings. Some investors began to question Sprint's then-$3 billion commitment to building a WiMax network, although the expense is being softened now that Sprint has teamed up with Clearwire LLC (Nasdaq: CLWR). (See Sprint & WiMax and Clearwire & Sprint Team on WiMax.)

Sprint's woes don't end here. The company says its third-quarter results, to be announced November 1, will reflect revenues lower than the $41 billion to $42 billion the company previously predicted. Sprint says it also expects to report a net loss of 337,000 post-paid subscribers for the quarter, which ended in September.

— Craig Matsumoto, West Coast Editor, Light Reading